Compliance assessment ensures that organizations meet their regulatory obligations and maintain a strong compliance framework. It involves evaluating the effectiveness of compliance programs, policies, and processes to identify compliance gaps, mitigate risks, and drive continuous improvement.

Through this blog post, you’ll learn how to assess compliance, what assessing compliance means, and key considerations when assessing your current compliance posture. Learn how to assess compliance with these 6 steps.

What Does “Assessing Compliance” Mean?  

It’s important to understand what assessing compliance actually means to your organization before jumping into the tactical execution of compliance program assessments. A compliance assessment helps identify gaps between an organization’s existing controls and what needs to be done to achieve compliance goals. Basically, they show you the current state of compliance and are meant to provide actionable steps to improve an organization’s compliance posture.

Compliance assessment, also known as compliance auditing or compliance review, is a systematic evaluation process conducted to assess an organization’s adherence to applicable laws, regulations, policies, procedures, and industry standards. Compliance assessment aims to determine the extent to which the organization complies with legal and regulatory requirements, internal policies, and ethical standards. You must conduct a compliance assessment to identify whether your organization adheres to regulatory requirements, if any gaps exist, implement corrective actions, and continuously improve compliance programs.

Why it’s important to assess compliance? 

A recent Thomson Reuters study says that 78% of compliance leaders expect regulatory information to increase in the coming years. Since industry and regulatory requirements are constantly changing and updating, assessing compliance is important to ensure your organization meets standards regularly.

Additional benefits to assessing compliance regularly are:

• Ensure that your organization’s stakeholders and employees adhere to internal and external policies and standards.
• The peace of mind of knowing that business-critical controls and programs are in place and effectively managed.
• Being able to prove compliance and support that claim with an audit trail from each compliance assessment you perform. 

How to Assess Compliance?

It’s important to take a systematic approach as you start to assess compliance within your organization. We also recommend performing compliance assessments on a regular schedule and prioritizing any action items that may be needed to improve your compliance programs.

Step 1: Plan the Assessment  

The first step towards assessing compliance is to plan your assessment. Clearly define the scope of the assessment with the following considerations:  

• Understand your organization’s compliance goals  
• Determine a baseline for compliance benchmarking and KPIs  
• Define compliance effectiveness in your organization’s context  
• Decide who will do the assessment – Senior compliance executive or in some cases audit teams  

As you prepare for your assessment, gaining the buy-in from the senior leadership team will be key. Align on the goals and key KPI’s set during this phase. This will help your programs run more smoothly and see the maximum impact upon completion.

Define clear and measurable criteria for compliance based on the identified requirements. These criteria will serve as the basis for your assessment and provide a benchmark to evaluate the organization’s adherence.

Step 2: Conduct A Compliance Review  

Once you’ve planned and set goals for your upcoming compliance assessment, the next step is to assess compliance throughout your organization.

An effective compliance evaluation should identify a specific compliance area’s strengths, vulnerabilities, and opportunities.  

Develop Assessment Criteria: Define specific assessment criteria or standards against which the assessment will be conducted. These criteria should align with the objectives and compliance requirements.

Data Collection: Gather relevant data, documents, and information. This can involve collecting policies, procedures, records, and other relevant documentation, as well as conducting interviews or surveys.

Data Analysis: Analyze the collected data to assess compliance, identify patterns, trends, and potential areas of non-compliance or risk. Use the established criteria to guide your analysis.

Evaluation and Gap Analysis: Evaluate the assessment findings against the defined criteria. Conduct a gap analysis to identify discrepancies between current practices and desired standards or compliance requirements.

Report Findings: Prepare a detailed report summarizing the assessment findings. The report should include a description of the assessment process, areas of compliance, identified gaps or non-compliance, and any recommendations or actions needed. 

Key components to take into account when you are conducting your internal compliance assessment

Here are some of the key components to take into account when you are conducting your internal compliance assessment:

Standards, Policies, and Procedures

For each regulatory requirement that your organization must comply with, examine what related standards, policies, and procedures are implemented.

Oversight and Leadership

Evaluate whether senior leadership is aware of and is overseeing your organization’s compliance programs. Probe to see whether or not they are convinced about the effectiveness of each program.

Assessment of Current Risks

Assess whether or not organizational and compliance-related risks have been identified and if there are mitigation strategies in place for each risk.

Employee Training and Feedback

Review the last time training programs were conducted to educate employees on your organization’s procedures and policies. Evaluate whether or not employees are encouraged to report issues to the management team without fear.   

Please note: Depending on your organization. there may be more areas within your business that will need to be audited. We recommend working internally to gather each area that will need to be assessed.

Step 3: Analyze Findings and Perform a Gap Assessment  

After you’ve gathered all of your data from step 2, evaluate your current compliance posture. Be sure to document and maintain your findings in a centralized location.

Identify Root Causes: For areas of non-compliance or identified gaps, dig deeper to identify the root causes of the issues. Understanding why non-compliance occurs is crucial for effective corrective actions.

• Analyze what is needed to be fully compliant with the specific regulations and standards your organization must satisfy.
• Document and review what your organization has in place today (From your findings in step 2)
• Perform a gap assessment to identify the gaps between what is needed to be fully compliant and what your organization is doing today.

The more structured you can be the better. This will allow you to quickly and easily find and report on your findings. This analysis will also act as a benchmark for when you complete your next compliance assessment.

Step 4: Review and Report to Key Stakeholders 

After you’ve completed the assessment and identified gaps, report your findings to your organization’s leadership team, and key stakeholders. Highlight and explain existing gaps by providing context, supporting data, and documentation. 

Show how key performance areas are impacted by non-compliance and outline the risks involved. Focus on driving program goals, action steps, and outcomes.

If you have already gotten buy-in from your leadership team, this step will become much easier because they will already be on board. In either case, show how key performance areas are impacted by non-compliance and outline the risks involved.

Gather feedback from your leadership team and work together to create an action plan to improve your compliance posture. Focus on driving program goals, action steps, and outcomes.

Step 5: Develop a Plan to Improve Your Compliance Posture 

The last step in assessing your organization’s compliance is to develop a plan to improve your compliance posture and to mitigate risk.

Rank each gap and risk you have identified in terms of their business impact, ease of implementation, and risk level.

Address the critical items and develop a plan to address each compliance gap. Establish a centralized repository for compliance tasks and evidence collection.

For each action item that needs to be completed assign a responsibility owner in charge of completing these tasks. Be sure their performance is overseen so that way they complete their action items on time and with a high level of accuracy.
Begin implementing the corrective measures outlined in the action plan. Monitor progress, ensure that responsible parties are taking appropriate actions, and track deadlines.

Step 6: Adopt Compliance Management Tools

Assessing compliance can be very complex, especially when you consider all the steps needed to do it correctly. Using technology to manage the assessment process and your compliance posture as a whole can reduce the complexity and time needed to ensure compliance.

Compliance management tools allow for the automation of manual tasks like managing responsibilities, reporting, and follow-ups.

Another great example is the ability to adapt to new compliance norms. As regulations are changing every day, it can be difficult for compliance officers to keep up. Adapting to new regulations and conducting internal reviews and assessments can be easily managed with the right tools.

Assess Compliance with VComply

VComply is a compliance management platform that was built with the end user in mind. Our easy-to-use, highly customizable compliance management tool will allow you to manage your compliance with ease. It helps:

• Implement compliance programs
• Gain one single source of truth for your compliance programs.
• Collaborate and assign tasks in one place
• Automate workflows
• Create compliance reports with a click of a button.

VComply allows organizations to create customized questionnaires and surveys that align with specific compliance requirements. These questionnaires can be tailored to address the unique needs and objectives of the assessment.

The software offers automated checklist features, enabling organizations to create and manage compliance checklists for various regulations and standards. These checklists help ensure that all necessary steps are followed to maintain compliance.

VComply offers a complete GRC management solution to help you streamline everyday compliance processes with a centrally managed, cloud-hosted system. If you’re looking for a better way to manage governance, risk, and compliance in your organization, book a demo now.